Breadsticks At Olive Garden Highlight Financial Strain On America’s Middle Class

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A friend emailed a link regarding Olive Garden traffic and sales. I created a new chart that agrees. Call it the breadstick indicator.

The Breadstick Indicator

Please consider Heard on the Street: Breadsticks Highlight Financial Strain on America’s Middle Class

Olive Garden, Applebee’s and IHOP are the closest informal economic barometer, according to a study by professors at MIT’s Sloan School. And unlike mom-and-pop restaurants, parent companies Darden Restaurants and Dine Brands helpfully break out detailed numbers for investors in their quarterly results. The signs for the U.S. middle-class consumer aren’t great.

Darden reported Thursday that same-store sales at Olive Garden fell by 1.5% last quarter from a year earlier. By contrast, same-store sales rose by 4.4% a year ago and by 6.1% and 4.1% in the first two quarters of this fiscal year before falling by 1.8% in the fiscal third quarter.

Likewise, Dine Brands Global reported last month that domestic same restaurant sales at Applebee’s and IHOP fell by 4.6% and 1.7%, respectively, during that company’s fiscal first quarter.

Placer.ai also points out a far healthier trend at Ruth’s Chris, the high-end steakhouse Darden bought a year ago and for which it doesn’t yet break out same-store trends. Traffic to that chain in May was up by 8.3% compared with a 3.9% rise for Olive Garden.

Traffic at Olive Garden is up 3.9 percent but same-store sales are down 1.5 percent. Are people filling up on unlimited breadsticks? Drinking less wine?

Meanwhile, traffic at Ruth’s Chris is up 8.3 percent.

I’m not sure I believe traffic is up 3.9 percent at Olive Garden, but I do believe the discrepancy with Ruth’s Chris as well as the declining Olive Garden store sales numbers.

Retail Sales Were Very Weak in May Counting Negative Revisions

On June 18, I commented Retail Sales Were Very Weak in May Counting Negative Revisions

The Olive Garden article inspired the lead chart. Retail sales are weak elsewhere too.

Housing Starts and Permits Drop to the Lowest Level in Four Years

Hoot of the day: The Bloomberg Econoday consensus had housing starts and permits both rising. Several charts show how much they dropped.

Housing Starts, Permits, and Completions data from the Commerce Department, chart by Mish

Earlier today I noted Housing Starts and Permits Drop to the Lowest Level in Four Years

Few can afford houses.

Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun

Unemployment is rising and job openings have crashed. It looks recessionary. Let’s investigate with a series of pictures.

Job openings and unemployment level from the BLS, chart by Mish

Weakness is pervasive. For discussion, please see Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun


More By This Author:

Housing Starts And Permits Drop To The Lowest Level In Four Years
A New High-Rise Building Will House The LA Homeless In $600,000 Units
NAHB Wells Fargo Housing Market Index Continues To Slide

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